Seoul: The South Korean financial sector's first-quarter investment in overseas real estate fell from the previous three-month period amid weak market conditions, data showed Tuesday. Banks, insurers, and other financial institutions had held an outstanding 55.5 trillion won (US$38.92 billion) worth of investment in overseas real estate as of end-March, down 0.5 trillion won from three months earlier.

According to Yonhap News Agency, insurers' outstanding investment in overseas real estate stood at 30.3 trillion won, followed by banks with 12.1 trillion won and securities firms with 7.5 trillion won. Of the 32.9 trillion won invested by financial companies in single investment sites, 2.49 trillion won, or 7.57 percent, was at risk of an event of default (EOD).

An EOD occurs when a debtor's credit risk rises and a financial institution recalls loans before maturity, which can result in losses for domestic financial firms for their property investment. "The overseas commercial real estate sector is showing signs of recovery in general, but the corporate office space rent sector remains subdued in line with changing work patterns and high vacancy rates, raising the possibility of further losses," the FSS said.